$512,290 in Unpaid Wages and Damages Against Developer for FLSA Violations

Friday, February 6, 2015

A federal court has ordered local developer David Emami and three of his affiliated companies to pay 33 Portland-area employees $512,290 in unpaid wages and liquidated damages. The U.S. District Court for the District of Oregon agreed with a U.S. Department of Labor investigation that found that Emami and companies Oak Grove Cinemas Inc., Barrington Management LLC and Barrington Venture LLC willfully violated the overtime and record-keeping provisions of the Fair Labor Standards Act. The court also held that Emami violated the anti-retaliation protections of the FLSA by threatening employees who cooperated with the department's investigation. 

The department concluded that those Emami employed as general maintenance, landscaping and construction workers at commercial properties he owned or maintained had two time cards for most pay periods. On one time card, an employee recorded their morning start time and a midafternoon end time. The employees immediately clocked in on a second time card to record the remainder of a day's work hours. The workers' duties and rates of pay remained the same each day at each work location. 

Workers typically received two paychecks each time they were paid — one from Emami's Oak Grove Cinemas and another from Barrington Management or Barrington Venture. The employer claimed that the employees were independent contractors during the hours they spent working for the Barrington companies. The combined paychecks covered all of the employees' hours, including those over 40 per week, paid at straight time. The department found, and the court agreed, that Emami's "scheme" was deliberately concocted to avoid paying his employees overtime. 

The court also found that Emami violated the anti-retaliation provision of the FLSA by threatening to retaliate against employees for cooperating with the department's investigation or becoming a witness for the government. Threats of retaliation included intimidation and threats of physical force against cooperating employees.

The FLSA requires that covered employees be paid at least the federal minimum wage of $7.25 per hour, as well as time and one-half their regular rates for every hour worked beyond 40 per week. The law also requires employers to maintain accurate records of employees' wages, hours and other conditions of employment and prohibits employers from retaliating against employees who exercise their rights under the law. The FLSA provides that employers who violate the law are generally liable to employees for their back wages and an equal amount in liquidated damages, which are paid directly to the affected employees.

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